Feb 22, 2001

World Auto Production At a Glance

By Joe Scarry

I had asked my friend to review my report on world auto production. For a long time he read silently, nodding his head here and there. "Germany . . . okay . . . England . . . yes . . . --" Suddenly he stopped, looked up at quizzically, and then blurted out, "Spain produces nearly 3 million cars and trucks a year? NO WAY!"

Way.

For many of us, our mental image of the global auto production landscape tends to be out of wack. The reason may be that some of our ideas about the size of regional car and truck markets are -- pardon the expression -- stalled back at early '90s levels. Another is that we may not realize that the nationality of the nameplate on the car is becoming more and more disconnected from where that car is actually produced.

One simple corrective is to haul out the numbers and see how things really stack up. Our World Auto Production Graph, based on data from Ward's Automotive Handbook 2000, paints a very clear picture:

1. The world is broken up into three markets of roughly similar size: North America, Europe, and Asia each have a market of about 17 million units annually (including all autos, trucks, and buses).
2. Some things are slow to change: 90% of the world's auto production still takes place in just 12 countries, and the top three -- United States, Japan, and Germany -- account for fully 50% of units sold.
3. The North American market has a simple composition: 75% - 15% - 10 % for the U.S., Canada, and Mexico, respectively.
4. In Europe, most (90%) of the production is in the 5 major economies: Germany, France, Spain, UK, and Italy. (See chart).
5. In Asia, Japan accounts for roughly two-thirds of all production. Korean output is volatile, rising or falling as much as 25-50% from one year to the next.
6. Despite the similarity in size between North America and the two other major regions, it has a distinctly different product composition: There is a 50-50 breakdown between cars and trucks in North America; in both Europe and Asia, the breakdown is closer to 80-20.

Are there other trends in world auto production of which it is important to take note? Data for the years 1997 through 1999 show few significant trends in the major auto-producing nations. However, there are two phenomena that appear to be accelerating. First, auto production in Southeast Asia, while still quite small (several hundred thousand units annually) has been growing rapidly (15% and 25% increases in 1998 and 1999, respectively). Also, Hungary, a neat little market which manages to pump out a hundred thousand units a year, has also been growing at an impressive clip -- 15% in 1998 and 22% in 1999.